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107TH CONGRESS

1ST SESSION H. R. 960

To amend the Internal Revenue Code of 1986 to expand the incentives

for transferring land or easements therein for conservation purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 8, 2001

Mr. KOLBE introduced the following bill; which was referred to the Committee

on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to expand

the incentives for transferring land or easements therein

for conservation purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Conservation Tax In5 centive Act of 2001’’.
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1 SEC. 2. EXCLUSION OF 50 PERCENT OF GAIN ON SALES OF

2 LAND OR INTERESTS IN LAND OR WATER TO

3 ELIGIBLE ENTITIES FOR CONSERVATION

4 PURPOSES.

5 (a) IN GENERAL.—Part III of subchapter B of chap6 ter 1 of the Internal Revenue Code of 1986 (relating to

7 items specifically excluded from gross income) is amended

8 by inserting after section 121 the following new section:

9 ‘‘SEC. 121A. 50-PERCENT EXCLUSION OF GAIN ON SALES OF

10 LAND OR INTERESTS IN LAND OR WATER TO

11 ELIGIBLE ENTITIES FOR CONSERVATION

12 PURPOSES.

13 ‘‘(a) EXCLUSION.—Gross income shall not include 50

14 percent of any gain from the sale of land or an interest

15 in land or water (determined without regard to any im16 provements) to an eligible entity if—

17 ‘‘(1) such land or interest in land or water was

18 owned by the taxpayer or a member of the tax19 payer’s family (as defined in section 2032A(e)(2)) at

20 all times during the 3-year period ending on the date

21 of the sale, and

22 ‘‘(2) such land or interest in land or water is

23 being acquired by an eligible entity which provides

24 the taxpayer, at the time of acquisition, a written

25 letter of intent which shall include the following

26 statement: ‘The purchaser’s intent is that this acqui-
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1 sition will serve 1 or more of the conservation pur2 poses specified in clause (i), (ii), or (iii) of section

3 170(h)(4)(A).’

4 ‘‘(b) ELIGIBLE ENTITY.—For purposes of this sec5 tion, the term ‘eligible entity’ means—

6 ‘‘(1) any agency of the United States or of any

7 State or local government, or

8 ‘‘(2) any other organization that—

9 ‘‘(A) is organized and at all times operated

10 principally for 1 or more of the conservation

11 purposes specified in clause (i), (ii), or (iii) of

12 section 170(h)(4)(A), and

13 ‘‘(B) is described in section 170(h)(3).

14 ‘‘(c) STOCK IN HOLDING CORPORATIONS.—For pur15 poses of this section, the term ‘land or an interest in land

16 or water’ shall include stock in any corporation, if the fair

17 market value of the corporation’s land or interests in land

18 or water equals or exceeds 90 percent of the fair market

19 value of all of such corporation’s assets at all times during

20 the 3-year period ending on the date of the sale.’’.

21 (b) CLERICAL AMENDMENT.—The table of sections

22 for part III of subchapter B of chapter 1 of such Code

23 is amended by inserting after the item relating to section

24 121 the following new item:

‘‘Sec. 121A. 50-percent exclusion of gain on sales of land or interests in land or water to eligible entities for conservation purposes.’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to sales occurring on or after De3 cember 31, 2003.

4 SEC. 3. EXPANSION OF ESTATE TAX EXCLUSION FOR REAL

5 PROPERTY SUBJECT TO QUALIFIED CON6 SERVATION EASEMENT.

7 (a) REPEAL OF CERTAIN RESTRICTIONS ON WHERE

8 LAND IS LOCATED.—Clause (i) of section 2031(c)(8)(A)

9 of the Internal Revenue Code of 1986 (defining land sub10 ject to a qualified conservation easement) is amended to

11 read as follows:

12 ‘‘(i) which is located in the United

13 States or any possession of the United

14 States,’’.

15 (b) EFFECTIVE DATE.—The amendment made by

16 this section shall apply to estates of decedents dying after

17 December 31, 2001.

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